Business Plan of a Boutique House
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Transcript of Business Plan of a Boutique House
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Part# 1
Business Plan of Inter fashion Boutique
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1. Executive Summary
This report focuses on the different compensation practices designed by our own established
company called Inter fashion Boutique for different levels of employees. In this report we
have discussed about the organization, its vision, mission, product and service offerings, its
organogram and the total compensation package we offered. We have also focused about the
financial projections of our organizations with cash flow, total capital, balance sheet etc. Here,
we can try to find out that what determining factors are affected our compensation programs in
our country perspective, because compensations system varies country to country. While
determining compensations, we must consider our other competitor position and market trends.
So comparing to other rivalry we try to determine our compensation and other allowance with
basic pay, because our company is a retail organization. Then we analyzed the non-compensation
program from the perspectives of both the employees and the employers. Later, we came up with
few recommendations of our own business that can utilize to enhance its employee satisfaction
which increase its productivity. We think that at last our effort will bring fruitful ending. So we
offer our product in a different way and it creates a unique position of our brand to the target
customer. Recently we Plan to run 1 outlays and expand 3 more outlays in Dhaka city,
Siddheswari (First branch), Bannai branch(Proposed). And the other two branches in
Dhanmondi(Proposed). We are planning to establish 3 more outlays in Chittagong and Rajshahi.
We are also trying to expand our business in out of the country. At present we hope to capture the
40% of the market share in this sector (Estimated). Though we have some limitation but we are
sure that we can be able to overcome that and touch the number 3 position providing better
compensation package.
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2. Description of the company
Name of the company Inter Fashion Boutique
Time of Establishment- 15, january,2016.
Type of Business- Fashion and Jewelry Business.
Total Branch- 4(1st at siddeshwari in 2016, 2ND
in Dhanmondi in 2016. Banani and Rifles' square in 2017)
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Location- E-mail- Website-
34/B Mailbagh Chowdhury Para Khan Villa, Dhaka-1219. [email protected] http://www.interfashionhouse.com/
Founder- Sonia Akter, Tania Ahmed,Susan Farabi, Jufrin Akter and shahidul Islam.
3. Mission statement:
This Company wants to succeed through a strong customer loyalty. For this, it has a mission and
vision. Vision is a long term outlook of an organization which is possibly impossible to achieve.
On the other hand, Mission is that part of vision which can be practiced or implemented. The
vision and Mission of INTER FASHION BOUTIQUE are given below
Vision: Inter Fashion Boutique has a vision to establish them as Bangladeshs leading famous fair
trade fashion house, and to remain market leader. Throughout its business.
It expanded its business in international arena. Inter fashion house has a dream to develop
more artisans of Bangladesh and make them self-dependent and attract more and more
international customers towards Bangladeshi culture.
Mission: To become one of the 3rd business tycoon in this sector of Bangladesh.
Providing Modern and latest designed clothing for men and women.
To maintain and expose the traditional culture of Bangladesh.
Creating loyal customer by fair pricing with quality product
mailto:[email protected]://www.anjans.com/http://www.anjans.com/ -
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4. Organizational structure:
Other employee
Designer 30
Sales personnel 52
Production supervisor/cutting master 40
Tailors and others 33
Total employee 155
Managing
Director
Chief
operating officer
General Manger
Finance &
accounts
Manager
Marketing
Deputy General
Manager
HR and training
General
Manager
Administrative
and services
ve
General
Manager
Design
Assistant
manager
Merchandizing
Senior
manager
Quality
control
Senior
Manager
Information
technology
E-commerce
Executive officer
Inventory
control
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Inter
Fashion
Boutique
Dresses
Customers
TK
Figure: Financial Model
Inter
Fashion
Boutique
Delivery Profit
5. Product offering:
1. Mens clothing and Accessories
2. Womens clothing and Accessories
3. Kids clothing and Toys
4. Shoes (for men, women and kids)
5. Home Dcor
6. Office Accessories
7. Books and Stationery
8. Nakshi Kantha
9. Wedding Clothing and Accessories
10. Jewellery
11. Taaga
6. Financial structure:
Inter Fashion Boutique is financially strong. Its a partnership firm. It is not public limited
company so its still does not offer shares to the public and it does not published its annual
financial report to the public. It earns approximately 70% profit annually.
Financial objectives:
To attain 95% sales growth rate by the year 2019.
To lever up the business at year 2018.
To attain net profit margin of 80% in 2016, 85% in 2017 and 90% in 2018.
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To offer quality products at a competitively lower price.
To maintain strong cash flow balances.
Capital requirements:
It started with 1, 00, 000, 00 taka. Its a partnership firm. There are six partners. All are invested
taka 70, 00, 000. And rest 30, 00,000 taka invested from the bank.
Investment from own source:
Investors Amount (Taka) Sonia Akter (20%) 14,00,000
Tania Ahmed (20%) 14,00,000
Jufrin Akter (30%) 21,00,000
Susan Farabi (15%) 10,50,000
Shahidul Islam (15%) 10,50,000
Total Tk. 70,000,00
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Investment from Bank:
We take a long term loan from BRAC Bank, 13, 00,000 taka at the interest rate of 16.5% but
from this year we will pay interest rate at 17%.
Interest rate of bank loan:
Interest rate
2016-20 16.5%
2021-24 17%
Short term financing needs (1 year):
Monthly expenses: Shop rent, equipment purchase, workers wages, phone bills etc.
Inventory needs
Promotional needs: Advertisement, magazine, newspaper, internet etc.
Cash flow problem
Raw material purchase: Cloths.
Operating expenses
Other expenses
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Long term financing needs (10 years):
For these types of needs we took bank loan:
Capital formation
Business startup cost
Long term marketing activities
Expansion of facilities
Machinery purchase
Start-up requirements:
Start-up expenses
Legal TK 3,00,000
Rent TK 5,00,000
Insurance TK 200,000
Setup fixture TK 3,00,000
Equipment TK 10,00,000
Other TK 4,00,000
Total start-up expenses TK 27,00,000
Start-up assets TK 10,00,000
Cash required TK 5,00,000
Start-up inventory TK 4,00,000
Other current assets TK 5,00,000
Long term assets TK 15,00,000
Total start-up assets TK 39,00,000
Total start-up requirements TK 66,00,000
Start-up funding:
Start-up expenses to
fund
27,000,00
Start-up assets to
fund
39,00,000
Loans 30,00,000
Investment 70,00,000
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Intra Fashion Boutique
Cash flow statement
(Estimated)
For the year ended 31st December, 2016
Particulars Tk. Tk.
Cash at hand(beginning of the year) 5,00,000
Cash flow from operations activities:
Cash receipt from customer 30,00,000
(-)Cash paid to suppliers and employees(8,33000+200,000) 25,00,000
Cash generated from operations 5,00,000
Cash flow from Investment Activities
Addition to equipment 15,000,00
Purchasing securities 10,00,000
Net cash flow from investment activities (25,00,000)
Cash flow from Financial activities
Borrowing 30,00,000
Net cash flow from financial activities 30,00,000
Net increase in Cash at hand Tk.15,00,000
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Inter Fashion Boutique
Income Statement (Estimated)
For The Year Ended December 31, 2016.
Dr. Cr.
Revenues:
Gross Revenues (including INTEREST income)
95,00,000
(-)Expenses:
Advertising
500,000
Salaries 42,84000
Legal & Professional Services 3,00,000
Rent 3,00,000
Materials 1,71,000,
Office expenses 1,00,000
Utilities 2,00,000
Commissions 5,00,000
Bank interest 4,95000
Interest of capital 7,00,000
Entertainment 1,00,000
Insurance 2,00,000
Sales transportation 150000
Total Expenses: 80,00,000
Operating Income-(2100000-1475000) 15,00,000
(-) Provision for income 1,50,000
Net Income= Tk.13,50,000
Inter Fashion Boutique
Balance sheet
(Estimated)
For the year ended, 31st December, 2016.
Particulars Tk. Tk.
Assets:
Current Assets:
Cash 15,00,000
Bank Balance 10,00,000
Ending inventory(Finished Products) 5,00,000
Sundry Debtor 4,00,000
Advance expenses 1,50000
Other current Assets 5,00,000
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Total current Assets= 40,50000
Investment(Long term) 15,00,000
All Fixed Assets 35,00,000
Goodwill 9,50000
Primary expenses 20,000,00
Total Fixed Asset 79,50000
Total current and fixed Assets Tk.1,20,000,00
Capital and Liabilities:
Current Liabilities 5,00,000 Long term liabilities 30,00,000
Provision for income 150,000
Total liabilities 36,50000
Capital 7,00,000
(+) net income 13,50000
Total Equity 83,50000
Total Capital and liabilities Tk.1,20,00,000
7. Marketing activity:
A pioneer in the country's craft industry, Inter's unique product designs have brought consumer
attention back to crafts and materials indigenous to Bangladesh, as its designers blend the
traditional with the contemporary in a way that continues to win consumer appeal. Its success
revolutionized trends and virtually created the market that has now been taken up by countless
other boutiques and brands. Inter caters to this growing urban consumer base through outlets in
every major city in the country. Their discerning style and high-quality craftsmanship make
every Inter product unique and demand for them has been consistently rising due to Inter's focus
on innovation, quality, value-based pricing and superior in-store customer service. All these
elements, backed by a robust distribution network and strong supply chain, have made Inter a
true household brand in Bangladesh. Just as Bangladeshis living abroad look to Inter for products
that connect them to their heritage, the Inter experience is an essential part of any trip to
Bangladesh by foreign visitors a phenomenon chronicled in the "Lonely Planet" guide to
Bangladesh. Inter products are not only the gift items of choice for every occasion for local and
expatriate Bangladeshis but also the quintessential cultural mementos for these visitors. Inter's
growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail
franchise in London - continues to broaden the market for Bangladeshi craft globally Inter
symbolizes fairness in the global village. Inter fashion house has a large and big rivalry such as
Aarong, Aanjans, Rang, Deshal. Kcraft, Banglar mela etc. they are decide their compensation
policy based on some criteria or factors actually private organizations cannot follow strict rules
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or policy regarding compensation. But as new comer we need to follow best and lucrative
compensation package to attract and retain our best employees.
The organization has identified three basic constraints for gainful employment of the low income
and marginalized people in the rural areas: lack of working capital, marketing support and
opportunity for skills development. In order to bridge these gaps, Inter provides a wide range of
services to its workers and suppliers:
Spot payment on product delivery to encourage efficiency and productivity
Reach out to producers in remote areas to ensure fair value for their efforts
Marketing communication and information for artisans
Advances against purchase orders where necessary
Training & Education in skills development to raise product quality and marketability
Product Design and Support in Product Development
Quality Control to increase producer awareness of the importance of quality
Inter Retail Outlets:
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Inter sales its products through its own outlets, Inter follow zero distribution channel. Around the
country Inter has ten outlets six outlets in Dhaka in six major parts (Dhanmondi, Gulshan, Uttara,
Maghbazar, Wari and Mirpur) and outside Dhaka Inter have two outlets in Chittagong, one in
Sylhet and one in Khulna. And outside Bangladesh Inter has one shop in London, United
Kingdom.
We set our price based on some things:
Cost of direct materials
Annual cost
Potentiality of cost
Administration and office cost
Promotion:
Young people of 25-35, for them Inter is a trusted brand. They visit the store often, buying
products mostly for gifts, sometimes for their own consumption. For them Inter provides the
reassurance that they have bought a quality product, thats their friends will appreciate as it is
from Inter. But they dont feel excited about brand. They miss out the excitement. They dont
feel it fits completely in their life the advertising should
Trigger strong interest among non-users to try the brand
Encourage regular usage
Establish the new Inter positioning
Program:
Inter fashion main marketing promotional activities are:
1. Sponsorship making in various occasions like Pahela Baishakh, Pahela Falgun
2. Various television programs dresses are courteous by Inter
3. Social campaigning programs are co-operated by Inter
4. Price discounting is their promotional activities. Besides, all this a things they use TV
advertisement, Fashion show for their up-coming innovative products, Bill board advertisement
and so on.
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Brand value:
Inter stands for a unique mix of design, quality and convenience, of the traditional and the
contemporary. Inter is one-of-a-kind globally positioned as a highly successful Bangladeshi craft
based retail chain and brand of pride. It also carries the distinction of being BRAC's most
successful social enterprise. Inter's responsibility is therefore two-fold - delivering unique
products with the highest level of quality and service to its customers and the strongest level of
support and protection of artisans and their craft. To its consumers, Inter is a household name - a
one-stop shop and a trusted brand that inspires pride, promises quality and sophistication, and
helps to keep cultural roots alive in everyday life. For the artisans, Inter represents the endurance
of both their age-old art as well as their livelihoods. For consumers and artisans alike, Inter has
become a part of the cultural fabric of their lives.
8. SWOT Analysis of Inter:
SWOT analysis is a powerful technique for understanding organizations Strength & Weakness
and looking for the Opportunities & Threats it may face. Used in a business context it helps
organization carve a sustainable niche in a market. This analysis is mainly based on an imaginary
situation.
http://mdshossain.wordpress.com/2009/03/17/swot-analysis-of-aarong/ -
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SWOT analysis of Inter
Strength
Inter is a very reputed organization. They are now capturing 68% of total handicraft market share
in Bangladesh. Its a local brand and now exporting their products outside of the country. Inter
has good reputation for fine quality products. It has a strong management team who are
continuously giving their great effort to make it a successful one. Another important fact is that,
Inter has almost Zero production damage rate which reduces their cost. They are innovative
and always bring some new product in the market which meets customer requirement and
expectations. The organization is a respected employer that values its workforce.
Weakness
Inter has a reputation for new product development and creativity. However, they remain
vulnerable to the possibility that their producer may not be able to produce product timely due to
their inability. The collection channel of the organization is not that much structured so that they
can get the products from the producer on time and it may create problem for them in future. If
any producer is not able to make the product on time due to some personnel problem then the
company will also not be able to deliver their product on time. This is a big problem and it
happens most of the time on delivery. Inter charges higher price relatively than their other
competitors as a result sometimes customers lose their interest to by product from them. Its sales
force or sales girls within the outlet are not properly trained up. Sometimes they make customers
disappointed by their attitude and customer doesnt feel good to buy from there. Sometimes they
suffer for financial problem, although its a rare situation.
Opportunities
Inter Fashion Boutique is very good at capturing the advantage of opportunities. It can go for
new distribution channel like it can make some joint venture with some other small Boutique and
sales its products in more places. Through that it can capture more market share in the hand.
Industry in Bangladesh. Inter can expand its business globally. New market for handicraft such
as Europe and America are beginning to emerge. People are now trendier about local events &
functions like PahelaFalgun, PahelaBaisakh, Victory day, Independence Day etc and they buy
new and special products for these events. Inter can make new products to sell in those special
occasions. According to the season change, people are also changing their preference in buying
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products and considering this scenario Inter can produce products on the basis of seasonal
variations.
Threats
Inter doesnt have any big competitors right now. But they have some small competitors like
KayKraft, Anjans, Deshal, Jattra, Khubsurti, Rina Latif, OZ, Rang and some other Boutiques
established at Banani 11, who are taking their 32% customer and increasing in a slow rate. Inter
always face price wars with their competitors. Its competitors have some superior products like
OGs Panjabi shape, Khubsurtis design of Salwar kamiz Rangs Sharis color, which is
decreasing Inters market share as well as sales. But now they are repositioning their Brand to
compete with them.
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9. Compensation Packages of Inter Fashion Boutique
Compensation is the direct and indirect monetary and non-monetary rewards given to employees
on the basis of the value of the jobs, their personal contributions and their performance. When
making these payments one should be alive to the governing legal regulations and should be
complied with the existing practices of payments exercised in a particular country.
Dimension of Compensation system
There are 2 dimensions of compensation system. So while planning compensation packages we
need to consider the following two dimensions:
Compensation Dimensions Non-compensation Dimensions
Pay for work and performance. Enhance dignity and satisfaction from work performed.
Pay for time not worked. Enhance physiological health, intellectual growth and emotional
maturity.
Loss of job income continuation. Promote constructive social relationship with Co-workers.
Disability income continuation. Design jobs that require adequate attention and effort.
Deferred income. Allocate sufficient resources to perform work assignments.
Health, accident and liability protection. Grant sufficient control over the jobs to meet personal demands.
Income equivalent payments. Offer supportive leadership and management.
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Compensation Strategy
Contingent factors are:
Legal requirements or Govt. policies
Strength of Trade Unions
Labor market conditions &
Capacity of the organization to pay.
Compensation Philosophy while making compensation decision
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Factors influencing Compensation policies
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Factors determination of Rates of Pay
Compensation structure
Kinds and levels of required
knowledge and skills
Kinds of business
Union and non-union
status
Capital intensive
versus labor intensive
Size of business
Philosophy of
management
Total compensatio
n package
Geographic location
Supply and demand for
labor
Profitability of a firm
Employment stability
Gender differences
Employee tenure and
performance
Compensation and Benifits
Basic Pay
Allowances(Taxa
ble)
Reimbursement
(Tax free)
Incentives
Benifits
Other perquisi
te
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Determination of Compensation
There are 5 major factors which we take into consideration while making compensation plan for
Inter Fashion Houses employees. And they are as follows:-
1. Incentives and bonus plans They shouldn't be seen as a guaranteed payment, but instead should be measured by performance
of the individual, team or company.
2. Understand the costs of a benefit plan When assessing what benefits to add, consider not only today's direct costs, but also long-term
expenses.
3. Calculation of employer payroll taxes into the overall payroll budget.
Employers incur expenses, such as Social
Security and Medicare tax, unemployment
insurance for both state and federal entities, and
workers' compensation insurance
4. Position of the employees Does it best correlate with direct payment on an hourly or salaried basis or is commission a
better arrangement?
For example-Employees in sales-related
positions should have commission as a part of
their compensation package
5. Payroll Budgeting Payroll budgets need to include direct wage and salary payments, commissions, bonuses,
incentives, payroll taxes and insurance, along
with any other directly related costs the business
incurs in the payroll function.
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So considering the above various aspects of Compensation program we plan our
compensation as follows:
Compensation budget
The amount of money companies spend on employee compensation each year represents a
significant portion of operating expenses. Average payroll costs run anywhere from 23% (retail)
to 41% (service firms) of the entire operating budget of an organization.
As a result, compensation planning is clearly one of the most important responsibilities of
todays compensation professional. Annual compensation planning involves preparing budgets to
address salary increases, salary structure adjustments, promotion increases and variable pay
expenditures. Typically, the budget process occurs well in advance of fiscal year end so that cost
projections can be included in operating budget forecasts for the coming year.
Although, our total asset we allotted a separated budget for our employee compensation
packages. Our estimate amount is
Inter fashion Boutique
Projected Work Salary Sheet
For the month of December 31, Year 201.
SL
No
Designation No of
employee
Working hour Salary per
month
Total salary
per month
1 Managing director 1 Office hour 75000 100000
2 Chief operating
officer
1 Office hour 70000 80000
3 General manager
Finance & accounts
1 Office hour 69000 85000
4 Deputy general
manger
HR and Training
1 Office hour &
when needed
65000 81000
5 Manager 1 Office hour 50000 62000
6 General manger
Administrative &
services
1 Office hour 48000 55000
7 General manger
Design
1 Office hour 40000 50000
8 Assistant manager
merchandizing
1 Office hour &
overtime
38000 47000
9 Senior manger
quality control
1 Office hour 35000 45000
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10. Senior manger
Information
technology
1 Office hour &
when
emergency
30000 37000
11. Executive officer
Inventory control
1 Office hour 30000 40000
12. E-commerce officer 2 Office hour
and in-house
job
25000 32000
14. Marketing manager 4 Office hour
and different
locations
22500 38000
15. Designer 10 Office hour
and overtime
duty
20000 28000
16. Sales personnel 25 Office hour &
Shift work
12000 18000
17. Production master 40 Office hour
and extra duty
15000 20000
18. Tailors 33 Office hour & extra task when
needed
13500 15000
Total = 8,33,000
10. Conclusion
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